2007 Ford Territory TX - $42,990EGC

It's almost 10 years since the former boss of Ford Australia, Geoff Polites, predicted Australia's incredible appetite for four-wheel-drives would lead to the birth of a new breed of lifestyle vehicle.

From his years on the showroom floor, the former Sydney car dealer who went on to run the company he represented for so many years knew most 4WD owners really only wanted the space and the tall driving position such vehicles provide - and only a fraction of them ever explored the vehicle's off-road potential.

What if there was a vehicle that had the size, space and high driving position of a 4WD but was more car-like to drive and easier to manoeuvre in the city and suburbs?

Not long after he took over as the boss of Ford Australia, in 1999, Polites learned the company's car designers and engineers were on the same track. They were in the early stages of coming up with a soft-roader concept that would use components from the locally made Falcon sedan. Five years later the Territory was born.

It wasn't an easy process. Polites had to ask Ford headquarters in Detroit for $500 million to fund the project at a time when the company was losing vast sums of money globally. It was a big gamble but it reaped dividends. In its first full year on sale in Australia the Territory became the country's biggest selling recreational vehicle.

Related Content

The masterstroke was that Ford made the Territory available in two configurations: rear-drive and four-wheel-drive. Significantly, both models looked identical except for a discreet badge on the 4WD models and the rear-drive versions were $5000 cheaper than the 4WD variants, putting them within reach of buyers on a budget. Today, rear-drive models account for the majority of Territory sales. Polites was right: not everyone wanted to go off-road.

But he wasn't alone with this idea. About the same time as Ford Australia was working on the Territory project, Toyota, the biggest seller of 4WDs in Australia for the better part of 40 years, had come up with a concept of its own. Incredibly, both brands arrived at similar conclusions despite being unaware of what the rival was working on across the Pacific. In 2003 Toyota released its interpretation of the soft-roader theme: the Kluger.

Today, vehicles such as the Ford Territory and Toyota Kluger blend into the traffic as if they were always there. But they've only been around locally for a little over three years.

Holden watched this pair with interest - while it was busily working on a soft-roader with its Daewoo affiliate in Korea. To ensure it had some Australian flavour, Holden sent its chief designer, Michael Simcoe, to oversee the styling of the new model. Simcoe, best known as the man who designed the modern-day Monaro, was ultimately responsible for the shape of Holden's entrant in the mid-sized soft-roader market, the Captiva. Better late than never, it went on sale in October last year.

Today, one of the pioneers of the class, the Ford Territory, faces its toughest challenge yet as the competition heats up. After posting a strong result in 2005, Territory sales dropped by 21.7 per cent in 2006 - and were down 7.4 per cent in the first seven months of this year compared with the same period last year.

The Territory is still, however, the biggest seller among its mid-sized soft-roader peers. It outsells the Holden Captiva by two-to-one and the Kluger ranks a distant third. But that may be about to change.

To guarantee it would get the all-new, second-generation Kluger (the United States is the only other country where the new model is sold), Toyota Australia had to commit to 20,000 sales a year. If Toyota achieves this target, on current trends, it will become the biggest seller in its class.

It's an ambitious target given Kluger sales peaked at 7655 in 2005. However, taking a leaf from Ford's book, the new Kluger is available with a choice of two configurations: front-drive or all-wheel-drive. The new six-model Kluger line-up is also aggressively priced, so it's almost certain to make an impact on the competition.

With all of the above in mind we thought we'd introduce the new Kluger, which went on sale this week, to its likely rivals. We've chosen the most popular sub-$40,000 five-seat models from each brand (seven-seat versions of each are available).

While their philosophies are similar, each of these models is significantly different under the skin: the Territory is rear-drive, the Kluger is front-drive and the Captiva is all-wheel-drive. Does it make a difference? Let's find out.

The verdict

The fact that Ford and Holden recently introduced equipment changes and/or price cuts to their medium-sized soft-roaders demonstrates how fast buyer preferences are changing in this market.

It also shows they are preparing themselves for a tough battle. They know Toyota has ambitious sales targets with the new Kluger, so don't be surprised if you see Holden, Ford and Toyota doing sharp deals on these vehicles.

If the budget stretches only as far as the Captiva, buyers won't be disappointed if the car is going to be used mostly for suburban commuting. The engine is underpowered compared with its peers but for most uses it's probably fine. It has more standard safety equipment than a Territory, even though it is cheaper. Our only real reservations with the Captiva are that its quality and reliability are unknown and it will take a few years for it to establish a reputation, good or bad. And it has a temporary spare wheel and tyre.

The Territory is going to feel the most pressure. As the biggest seller, Ford has the most to lose. Recent changes have improved its appeal and it is still the best-handling vehicle among its peers.

The Kluger, however, beats it in areas arguably more important to families. It is roomier, has more standard safety equipment, is quicker and yet more fuel-efficient than both its main rivals. To top it off, it has Made-in-Japan build quality, a full-sized spare wheel and tyre, and cheaper, fixed-price routine servicing.

To sum up, the new Kluger is a step above the two other contenders in almost every regard. Rarely is an outcome of a comparison test so clear-cut. Perhaps the Kluger's sales targets aren't so ambitious after all.